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tv   Making Money With Charles Payne  FOX Business  December 17, 2018 2:00pm-3:00pm EST

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usually the glass is full with vodka in it. just so you know. neil: not even a glass. thank you very much, my friend. connell mcshane in for charles payne. this market took course of its own, bud. connell: i'm connell mcshane in for charles this week. say let's get through the next few days. the old santa claus rally could be around the corner in. that is the glass half full view. we'll talk about coming up. with less than five days to go before the government would shut down. the white house holding firm on the border wall. we have new reporting on that subject from our own blake burman. reaction from congressman tom
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reed. there is ruling from texas that could give the supreme court a chance to pull the plug on obamacare once and for all but will this end up backfiring politically on republicans? we have all that and more coming up what will be a busy hour, "making money." we're down almost 400 points for the dow jones industrial average. global concerns. uncertainty what the fed might do, more importantly might say later this week. so it does bring up that question, will investors get the santa rally that they seem to be waiting for and hoping for? we have s&p investment advisory services portfolio manager erin gibbs with us today. also from bubba, the chief strategist, todd horowitz joins us. todd, i know you've been
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bearish. we talked a lot. i will get to you in a moment. erin, interesting in a day like this down 380 on the dow, it has been relatively bullish, to use the guys terms that glass is sort of half full. so make that case to us. do you think people are kind of overreacting seeing a economy not as bad as they think or what is the case? no i think this is really fear that we're looking at uncertainty. we're not sure what happens with the trade war. some companies costs could go up 20% and that's a scary. when we look we're expecting next year the fundamental, we're looking 8% profit growth, we're looking 7% revenue growth. that is not an environment where you have recession or massivedown market. whenever talking about high single digits, profit growth that is solid economy. we're not super expensive. connell: you ruled out 2019 recession? that is off the table? >> we say that is completely off
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the table mainly looking at consumer spending. we wouldn't even consider it unless it got below 2% and it is at five. connell: before we go to todd, my friend sandra smith at fox news channel had kevin hassett white house economic advisors and they talked about next year. here is what kevin hassett had to say. >> probability of recession over the next months is about zero. i think that is the right read given the momentum in the economy. connell: kevin is in the erin gibbs plant. probability is zero is pretty low. many people would disagree with that. we have market trading down. are we pricing in a different probability? what is your take? >> i think the probability is significantly higher. i think when you look at the market, the markets are telling you there is a problem. we know they never announce themselves so what i would expect to see, i would expect a recession. if you want to by me a bet on zero i will take all he wants.
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there is a lot of issues here including rising wages and rates are going to rise no matter what the fed says today, they're signaling there's a problem. connell: let me ask you about stocks in particular, todd. the idea of rallying into the end of the year, it has become this annual thing. there are numbers to back it up. usually the market rallies towards the end of one year and first couple trading days of a new year. average gain of 1.3% over that seven seg time frame. is that something in the near term that as we selloff? we in some measures are oversold, right? >> there will not be what we call in the trade a rip your face rally at some point. it will look so good you will want to jump in. but at end of the day that is the point you want to sell. >> that is the point. erin, not everybody agree at some point, maybe not today, we're down 400 on the dow but as
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these levels get to a point where stocks, certain individual stocks and indices are kind of attractive people look at it say i want to jump in. todd says no, there is more bad news to come. have you been advising clients now is the time to buy, buy low? >> no, we're saying be cautious. this may not be the end of these fears. like i said, as long as the trade war concern is out there, that leads to uncertainty and we could still have down days o not necessarily saying we'll have to see a santa claus rally. i'm expecting the year to end close to zero. connell: we'll talk about that throughout the day. throwing in political concerns and investigations of president. you're seeing mostly trade. >> i look at volatility. most happens intraday. then you do, we have seen a sharp up tick across asset classes frequently with europe leading mainly on trade war
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days, fear days. connell: right. >> for us it is not about the fundamentals. we're still looking -- connell: final point from todd on that, biggest concern. you say you're bearish. a trade for you as well or? >> no, i don't think trade is an issue whatsoever. my biggest fear out here is that the fed will make the crucial mistake and try to continue to suppress rates instead of letting free markets price the asset classes. that eventually will be the real problem. trade to me is a non-event. connell: interesting. wish we had more time. but we don't. erin, todd, appreciate it. >> thank you. connell: with all the uncertainty we talk about in markets what about idea of a recession in 2019? a different view from what you heard from kevin hassett, came from liz ann sonders from charles schwab, she was interviewed by our own gerry baker here on friday. listen. >> there is 100% chance we'll get another recession. in the next year i think trade holds the key. right, i think the key to the
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length of runway between now and the next recession to a large degree does relate to trade. hopefully we'll have some answer to that in the next few months. connell: we're joined by the president of the american action forum, douglas holtz-eakin. just to be clear, liz ann is not saying 100% chance of recession to kevin hassett's zero, she said, as you know, doug we'll get another recession at one point. there is 100% chance of that. but the timing is based on trade. what is your take? >> i think there is a lot of truth to the fact that trade is crucial to the near term path of the economy. we've seen the toll that the trade tactics have taken over the past year. we've seen ceo confidence came out this morning. it is down to levels not seen since before the last presidential election. a big part of that ratcheting back capital expansion plans. all that is bad news for the growth rate of the economy. i don't think of that as recession risk. that is taking the upside away. to get a recession you have to have the household sector go
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south. with the guest you just had on, we would have to see household spending drop to negative 1% to get recession. it is growing at 3%. that is a big swing. there is nothing that will drive the sector that way. connell: as you look at equity market reaction. >> you're right about that. >> if you're looking at equity market, also other markets. look at the bond market. especially look at high yield for the last few -- is there overreaction in your judgment in financial markets to what is happening in the economy what the economic outlook is? >> i think two things are going on. one, it is traditional for financial markets to overreact. they swing more widely than the real economy. you don't see the economy bouncing around the way you do with equity markets. equity markets are filtering good and bad news, that is its function. the second thing i think there is a lot to be said for the fed being behind the curve and that
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by keeping rates low for a long time we got some inflation but it wasn't traditional consumer price inflation. it was asset inflation. so a lot of what you're seeing now is the fed getting back to normal. asset pricing getting back to normal ahead of it seven. that is good news in the bigger picture. living through it is not fun. over the long term that will serve the u.s. well. connell: putting themselves in a tough spot being behind the curve for that long? what do they do wednesday or more importantly what do they say? >> i think they move wednesday regardless. what they say i think is something that will not make anyone very happy. they will say this is all data dependent. we'll do the right thing, i promise you. we're close to normal, that means 100 basis-point range. people will scratch their heads. i think it will be a tough week. connell: where is neutral. the whole thing. >> right. we'll get the whole thing. connell: we look forward to that. make your own interpretations like choose your own adventure novel. go ahead, doug.
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>> go to charlie gasparino, have a drinking game. connell: gas parrino is another story. always half full with him. let me ask you about another question if i might which is the healthcare ruling. what do you make of that? a note came out from s&p, s&p global ratings after the judge ruled in texas on obamacare, ruled it unconstitutional, now it will go through the appeals process, says that the decision poses a threat to the credit quality of some states as well as hospitals and insurance companies because it is, logic from s&p goes the state has expanded medicaid could lose billions in federal money. trying to keep people insured and they're on the hook for a lot of money themselves. what do you make of this from a financial perspective? >> there is certainly a grain of truth in that. it has always been a risk to do the medicaid expansion. one fear was that federal government would ultimately renege. budget deficit is really bad. they might try to fix it at expense of the states.
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they would be left coming up with that money. this is an extreme version of that where it goes away entirely because of a judicial ruling. the good news there is a runway. they're not putting in a stay or injunction. the law will continue to operate. as appeals move through the courts it is something to keep an eye on. connell: we see the stocks of health insurance companies down for the most part today. always good to talk to you. douglas holtz-eakin. the view of what financial planners are advising their clients to do to get ready for next year. we're almost there. it will surprise you. showdown between the white house and capitol hill the trump administration is trying to hold firm on this border wall funding issue. are we headed towards a partial government shutdown? looking more and more likely. stay with us with more after a quick break. introducing add on advantage,
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"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. connell: what we're hearing likelihood after government shut down sin creasing. the trump administration nor the democrats on capitol hill are willing to budge the amount of money it takes to fund a border wall between the u.s. and
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mexico. we have new developments as we're learning more what the president's strategy might look like. blake burman with the latest news from the white house. what is the latest, blake. reporter: one of the things, connell, washington does best is punt or kick the can down the road and that could potentially be one option to sort of get past the holidays, maybe keep the government open for couple weeks or so, sort of take this up in 2019. however according to sources i've been talking to today have been involved in the white house planning, been in the meetings, et cetera, president trump at this point is not inclined to go down that road, whether a one or two stopgap continuing resolution as it is called here in washington, d.c. instead, the white house today doubling down on what the president said himself last week, which if the president doesn't get what he wants, as it relates to border wall funding there very well could be a government shutdown. director of strategic communications, mercedes schlapp
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as she spoke to stuart varney. >> president as mentioned last week he would shut down the government due to increased funding for border security. we'll see what deal the senate brings up. looking at the details we'll basically make the determination which direction we're going to go. reporter: president trump wants $5 billion for the border wall. democrats offer significantly less than that, what they are deeming border security and not necessarily the wall. the president taking aim at democrat the earlier today in which he said the following, he wet this on twitter, quote, anytime you hear a democrat saying you could have a good border security, good border security without a wall write them after as another politician following the party line. save us billion dollars of a year and at the same time far greater safety and control. so the president, i'm told, sort of writing off the possibility of a one or two week extension should they not be able to come
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to some bigger conclusion, connell. what remains one of the many questions here is, well maybe, what about a three or four-week or a 50-day or fill in the blank, throw out whatever number you want? that i guess we'll have to see here as negotiations continue over the next couple days. neil: connell: that is kind of interesting. doesn't eliminate a short-term extension. would be more than a week or two would be your point? >> when you look at calendar, one week brings between christmas and new year's. that doesn't do much good at least from a political perspective. two weeks brings you right to the beginning the new congress. that certainly doesn't do too much good from political perspective. what about longer term or short term. they will figure this out, connell. connell: i feel like we have had this conversation before. blake, good reporting. joined by republican congressman tom reed from the great state of new york, here in the studio. >> thanks for having me. connell: i'm sure you heard
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blake's reporting. does that mean a shutdown is obviously -- >> as we get close to it the potential of it occur something, there is room to avoid a shutdown. maybe we're looking at shorter term situation. fundamentally as the president has made clear, border security, how are we fixing the border? it will include structures. it is going to include a wall. at the end. day that is where the sweet spot -- connell: i see the president asking $5 billion for a wall. >> right. connell: the democrats saying we'll give you 1.$6 billion for fencing. is that where we are right now? is that where we are? how do the two side come together. >> i saw the president's meeting with nancy pelosi and chuck schumer in the white house, president said clearly shutting down the government for border security is what the president utilized. president is in sweet spot, having a wall, having a structure, recognizing there are other technology issues that could be put into the package to secure our border. >> you think so? that would be important?
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you think he is willing to back off from the wall? a normal person watching seems like it is semantics. from the politics of it what the president said on campaign trail, the words do matter. >> absolutely. the wall is the political symbol. anybody looks at this substantively, a wall has to be part of border security. because that is necessary in some parts of the border. but at the end of the day we need additional resources. that is where the compromise position will come down as we get closer to the potential shutdown. if we punt for 30 to 50 days, whatever the numbers happens to be we'll be right back into this. we shouldn't be shutting the government down. we should be solving problems for the american people. connell: how aggressive your side willing to be? stephen miller, advisor to the president on immigration. was on the sunday shows this weekend. here is what he had to say, steven mill smear at stake is the request question whether or not the united states remains could have vin country. whether or not or not we can
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enforce rules in our country. the democrat party has simple choice, they can fight for america's working class or allow illegal immigration, you can't do both. connell: chuck schumer says i don't think so, you're not getting the wall now or ever. >> what is being articulated. do democrats wand to be beholden of extreme portion of their party, essentially what nancy pelosi said that is a fence is immoral. that a wall is immoral. that to me is extreme. everyone recognizes as you look around the world, as you look around in our country, you need secure measures at our border to keep us safe. if you focus on that as a democrat or republican, that is where we compromise for better solution. connell: we'll see how you guys do. one of the other things plays into all of this. how much is really matters. in the big picture like today, down 350 points in the dow jones industrial average. seems to be a lot of other reasons. would i put this whole fight in washington on the list but probably far down the list after trade an growth concerns and
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number of other things probably because people have seen this, blake and i were talking about, we've seen this game before. you guys figure it out. maybe you shut it down a few days. you pay back the people who lost money. there is a little boy who cried wolf. >> i think you're on to something there, in the sense i've seen this before in congress. the theater and drama, i'm sick and tired of it. i this the american people are sick and tired of it. at end of the day i think we'll fix the short term issue with the shutdown by the end. week. we need to fix the root cause of immigration issues in america. that is non-functioning border. coupled you do have to take care of folks here illegally right now, the children in particular. there is a thank you deal to be struck there. we lead it all the time. connell: interesting. you have to get it done as you know in a split congress looks like. >> there is opportunity. time to govern for the people back home. connell: we're watching. thanks for being in the studio. congressman reed. shares of twitter, right now
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breaking news on shares of twitter, 33.83, on track for the biggest intraday percentage drop in couple months. what happened with twitter? the company announcing it may have revealed country code of phone numbers linked to some of its account holders. the stock, gerri willis joining from us the new york stock exchange. it is down big time. tell us more. >> connell this is a big move for twitter shares. here is what happened. twitter accidentally exposed the ability to pull up an account's phone number country code and then to see whether twitter had locked that account. now the concern here, the worry, the reason you would care is that malicious actors could have used a security flaw figure out which countries can the were based in. this could have ramifications for whistle-blowers or political dissidents. twitter says the issue has been resolved. a large number of inquiries came from where? saudi arabia and china. this is what they told reuters,
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we cannot confirm but we think the issues have ties to state-sponsored actors. the shares are down as much as 6% at one point. we're covering a little bit here. back to you. connell: saudi arabia and china. not russia. either way interesting. gerri, thanks. stocks we've been talking about trading in the red throughout the day, really accelerating that selling over the last hour or so, as investors brace for the decision from the federal reserve on wednesday. we'll preview that next with the dow down about 370 points. later in the show a judge in texas ruling obamacare is unconstitutional. will the supreme court get involved again and this time around how will it rule if has to rule on the health care law? we're coming right back on making "money". - [narrator] do you have less energy than you used to?
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>> i think the argument for the fed not to raise rates in december which is a strong one, not that things are weakening that we have a real strong economy here, charles, without inflation. the only reason why the fed would raise rates to flight inflation. we're not seeing that. and the reason, charles, we're not seeing that, the trump policies, the trump policies, basically allow to us grow by increasing investment, productivity. moving forward fighting inflation. deregulation fights inflation. connell: that interview may look familiar to you. it was on this very program with charles. peter navarro, the white house trade advisor urging the fed as you heard not to hike rates on wednesday but is the decision in couple days more about what the federal open market committee has to say rather than what they may or may not do when it comes to rates? we're joined by point view wealth management by president and chief investment strategist, david dietze. along with our own kristina partsineveloss.
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both kristina and david here in the studio. good to see you both. we'll take it up from where peter navarro said last week. there is no inflation. what are you doing here, federal reserve? >> he is right it is all about inflation but the question is there inflation going forward. like the great wayne gretsky says -- connell: where the puck goes. >> don't skate where the puck is going but skate to where it is going to be. federal reserve, monetary policy operates with a lag. you have to take steps now, take effects six months from now. you have unemployment at 49-year low. that is likely push prices up as more demand -- connell: is that make more sense, puck is in the inflationary zone? >> you are prepping for future. deficit continuing to climb. you have got the fact that corporate debt, look at the level of korb debt. corporate debt.
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interest rates rises affects large companies. high-yield bond market, there has been no -- connell: nothing. >> nothing, boring this month. we haven't seen it f it continues for the entire month of december we won't have seen a month like that since november of 2009. connell: mean nothing company in the high yield or junk bond market, distressed companies issued any debt this month, not at all? >> correct. one other factor too is oil. we saw oil come in below $50 a barrel. that is usually priced in when it comes to innation. connell: earlier question we started with, david, the challenge for the federal reserve, i don't think whether or not they raise rates t will be a surprise if they don't. maybe they won't. some people say you need to pause right now. say for argument's sake they do. what does it say for the future you're talking about? >> recognizing all the great points kristina just made. we have seen a weakening in the global economy. we have seen inflationary expectations come down as
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measured by the difference between the 10-year treasury and 10-year tips treasury. connell: right. >> commodities coming down, oil falling hard. they have to acknowledge to get credibility in the accompanying statement and give the market more dovish out look in terms of potential rate hikes. connell: they could do that. we were talking earlier about the whole class half empty and half full, part of the half full version, tough with the dow down 4 . hints, you say to yourself the fed slows down on interest rates and there is some sort of deal cut between the united states and china on trade in first three to six months of the year, second half of 2019 suddenly doesn't look too bad. that is the glass half-full. >> is it solely contingent on china? germany, pmi, purchasing managers index, yes it is climbing but not at such a high rate. all this concern about china. will that global effect trickle into the united states when our supply chains are connected? connell: would a deal boost some of that?
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>> of course it could boost it, but are you optimistic within the next six months or so you could actually address the i.p. theft issue? the fact the subsidies going to chinese corporations? connell: no on the ip issue. i don't think anybody is optimistic on that. at least in the next six months. i could be wrong but go ahead, david. >> there is no question about there are so many factors on the globe that will tie into this inflationary issue. you have issues in europe, brexit, italian debt. certainly if we got an agreement, at least commitment by china good faith address that issue i think markets would take kindly to that. that would justify a little bit more of a hawkish tone on the part of the fed. >> doesn't that defeat the whole purpose we started the trade war to begin with in good faith? we wanted the theft to stop. connell: you're 100% right f we have a deal gets us back to where we started that is not a deal worth more than the paper it is necessarily written on. david, quick thought on the market and we have wrap up where
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we are. >> earnings season ended. everyone is fighting for wednesday's fed announcement. we're waiting for what goes on in washington in terms of a potential shut down. we want news on the tariffs. we're being ex-very volatile on superficial items going out in the press and twitter. connell: how about that the press and twitter. trust neither one of those two places. david, kristina, thanks for both. watch making money on wednesday, you can see discussion on federal rate decision jay powell and company. they will have a press conference after the decision. all on "making money." shares of madison square garden company, msg, this is jumping. why are shares of madison square garden jumping? james dolan said he would consider selling the knicks. he told the person interviewing
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him he hasn't ruled it out, hasn't received an offer but would consider it if the right offer came in. ms-d shares are up assuming somebody would pay up big for the company. not on idea anybody but james dolan owning the knicks. they own rangers and radio city. get the latest look for you after this decision that calls obamacare unconstitutional. that's next with the dow down 370. at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.
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dow. the s&p 500 is trading at its lowest level for the year. we'll talk more about where you should think about putting your money as we head out of 2018 into 2019. that's coming up. health care stocks today have been helping to lead the market lower after a federal judge in texas ruled that obamacare is unconstitutional. hospital operators and insurance companies which theoretically which would be impacted the most if the law is eventually thrown out completely. in other words if this stands up to appeal, they have taken some of the biggest hits today. so we'll look at this from a couple different angles. we'll have political fallout from the ruling coming up in just a few minutes. we start with details of the decision itself. deirdre bolton is on that. she joins us from the newsroom. >> that is right, connell. on friday evening a federal judge ruling obamacare, known as the affordable care act is unconstitutional. he ruled the entire law should be struck down. as you mentioned health insurer hospital stocks are falling
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right now. as a matter of fact they're among the top three drops on the s&p 500. that decision according to experts will be appealed and does not take effect immediately. some traders at this point suggesting caution in dumping some of those stocks based on the headline of the most gop lawmakers say they want to preserve coverage for preexisting conditions but they will also oppose most or all of the law such as the requirement that most people obtain health insurance, that so-called individual mandate. so it is really unclear. almost everybody how the party will accomplish both goals at once. now some democrats we know are mulling legal action to challenge the judge's decision. earlier on congressman michael burgess he shared with us what he is hearing from his constituents. here he is. >> the issue i hear from people continually is, this system is too complex and it is too costly. so help us with the cost and the complexity. and nothing that, certainly happened within the affordable
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care act certainly helped complexity. it made it worse. >> connell as you know senator dick durbin was on abc this weekend, he said, listen, like it or not this issue is back. it is very much alive. now what we do know is with the republican congress, no replacement plan was able to be passed, we know the democrats take over the house in january. most people are saying more or less, any kind of solution is likely to be legal and not legislative. connell. back to you. connell: good enough. good summary. thank you, deirdre bolton. now while this decision is, you know, very well eventually may make its way all the way to the supreme court for right now to deirdre's point there is very little immediate impact, obamacare remains the law of the land through the legal process. the legal battle will continue from here. that is the practical side. on the legal side, constitutional attorney jenna ellis joins us now with
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analysis. deirdre gave a good summary. there is some of this that is complicated. i don't know how well people know exactly was decided. back up a little bit if you can, jenna, tell us what the judge actually said in the past in context to what was said in the past? >> thanks for having me, connell. great to see you. and what the federal judge ruled essentially is that the individual mandate which is the portion of the law that requires a tax payer to pay or an individual to pay a penalty for not having health care that is compliant under the law is unconstitutional because congress repealed that individual mandate so back in 2012, when conservatives were very disappointed with chief justice john roberts for holding that the individual mandate was actually a tax and therefore found kind of an end-run around the constitution to uphold the law, that's the portion the judge is now saying because it's gone there is no way this law is constitutional this is the right decision because even back in 2012, everyone from a
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conservative originalist perspective knew that government cannot force you to buy health care and health care is not even a subject matter that is given to the federal government. it should be reserved to the states. connell: going back to the 2012 supreme court decision, basically the logic used by chief justice roberts is gone. then it was a question is it a tax? it was. it was ruled to be a tax. but then that tax was reduced to zero so there is no tax. what i think is interesting say for the example we gave in financial markets today, we're showing all the health care stocks down. i've heard analysts, and the like come out and say, you know what? it is a buying opportunity in the stocks. there is overreaction. this ruling will get overturned on appeal. from what you're saying it is not that simple. what are your odds seeing it will be overturned at some point? >> it will go to the supreme court and will depend strongly on chief just sis roberts,
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because he was the swing vote in 2012, that he agreed the commerce clause doesn't give the federal government the ability to force someone to pay for something, yet he found that a tax loophole because that is fon he will have to find something else in the constitution to try to justify this. connell: right. >> hopefully with the more conservative majority. he won't. will side with the constitution and originalism. i would hope because the supreme court has brett kavanaugh on it as well, we'll have a majority of five that will eventually overturn the law and give health care back to the states. connell: right. to the key point, if roberts sticks to his guns or sticks to his previous logic, this very well could be out for good. it will take a while to get there. good analysis. we appreciate you coming on. now the fight to save obamacare may have helped democrats politically in terms of taking control of the house. we saw that in a lot of data. it was a huge issue for them in the midterms. at this point how will the republicans handle this ruling going into 2020?
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connell: president trump this morning praised the friday ruling on obamacare, declared the law unconstitutional. his tweet said deductible comes with obamacare so high it is practically not even usable. hurts families badly. we have a chance, working with the democrats to deliver great health care. a confirming supreme court decision will lead to great health care results for americans. that was the president earlier today. health care though has not necessarily been a winning issue recently for republicans and we saw that in the midterms and as we head into 2020 could this be one of the big issues that decides who the next president is? we're joined by fox news contributor deneen borelli, also from american university, capri cafaro. welcome to you both. great to have you both in studio. >> how are you? connell: good. deneen, the initial reaction from republicans is great. we've been wanting to shoot down obamacare for years. somebody finally moved in that direction. then it was like uh-oh we have
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to do something about this we'll take the blame politically. if it goes away there are popular elements, right? >> republicans should have ripped it out from the roots now we're witnessing chaos and fallout going on now. but when you look at the democrats how they message this to their base, this will be emotional issue i think, they will continue to talk about the preexisting condition aspect of it. connell: yeah. >> where republicans will be, a bit more logical. they will talk about the costs associated with it. who is going to pay for it. i think that will put republicans at a bit of a disadvantage in communication branding aspect. connell: short term, everybody is sort of realizing that, capri, you better be cale, if you're republicans what you wish for unless you have a plan to replace it. we saw it in the ads in midterms, health care, health care, health care, double or triple down on that, right? >> health care has traditionally been a strong policy issue for
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the democrats, not so much 2010 with the chaos surrounding the passing of the affordable care act. this is great opportunity for democrats to make strides and work with republicans in areas which they think they can find common ground on health care. connell: okay. >> for example, there is something called the cost sharing reduction which would essentially stablize the market and enable some market stability for costs associated with covering preexisting conditions. that is something democrats and republicans in the senate in particular said they're okay with. i really believe, democrats need to come to the table to have a plan. >> think they will work together if hold on, you don't think? >> i don't. i think they try to make this more after political play. connell: right. >> i think the american public wants solutions. more both sides play games the worse it will be for both sides. connell: that might be true in our theme of the show. i was ready to put you in the half-full camp now you said, i
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don't think. i agree, sad to look at it this way, the incentive structure of congress. what is the incentive to work together? democrats coming in. they will stand up to the president. the president will push what he wants and republicans? we'll talk about this -- >> for quite some time. connell: courts will weigh in. nothing is going away. >> democrats are looking to do investigations, they're looking at separate agenda versus making solutions to this big problem that we're seeing. and again, it is an emotional issue. i do think that people are going to recognize the fact that many americans have been harmed by failures of obamacare. the marketplace failure. it was sold on the promises that you can keep your rates, your -- connell: premiums going up? >> excuse me, right. connell: some elements they actually like. that is the political problem. right. >> the challenge is, is that because there are a number of, it is private sector insurance
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companies that are providing these marketplace plans which are associated with obamacare and what people think about obamacare. connell: yeah. >> open enrollment ended a few days ago for most of the states, they have to make sure that there is an ability for them from a business perspective to be able to cover individuals that are more costly with preexisting conditions. connell: yee. >> it's a give-and-take. look for pay for performance to align that kind of providing head -- connell: right incentives. >> for insurance companies this is a textbook example not to place all your bets on government leading the way, leading the charge -- business model. >> it could cost jobs. connell: it could cost jobs. stocks are down. just about every stock is down today. deneen, thank you, capri, thank you. good to see both of you. the dow is down 400 points. we continue with 10 trading sessions left for stocks in 2018. what you need to know to get that portfolio ready for 2019.
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clients as we head into a new year? ted oakley is with us and i'm sure you get some people freaking out, right? what advice have you been giving them? >> well, one of the things that's happening here is we have been on fox business a number of times in september and we said prices are high, we had higher cash, we thought bond yields would come down. this typically honestly is the first level. i think you will find a low in here and probably have some sort of intermediate move into the new year. i think investors need to realize we are late in the cycle now and you are going to have situations where they need to really rethink it when it comes to the first two months of the year. connell: okay. when they do that, it's not as simple as saying let's put the money under the mattress or get out of stocks entirely, is it? what's the strategy? i know it depends how old you are and the rest of it but in terms of risk, what's your strategy? >> so true. well, what happens is for us, you don't really come out of
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risk assets all the way. you just have to reduce. for us, we are 25% liquid in stock accounts. my guess is we will go to 30% or 35%. i think individuals ought to consider the same thing. but also consider this. we think there's a high probability that you will have a recession next year and if you do that, you need to own the treasury. i'm not talking about the one-year. i'm talking about the 15, 20, 30 year treasury. connell: kevin was on earlier saying there's a 0% chance of a 2019 recession. i assume you think it's a number significantly higher than that? >> well, we think we will be in recession sometime by the second or third quarter. but as you know, that makes a horse race. connell: right. it's not the end of the world, right? it may be a somewhat mild recession. you have to be ready for what's on the other side. >> you are correct. it could very well be that, it may just be a really steep slowdown. i think for most people, that haven't experienced anything the last ten years, a steep slowdown would feel like a recession.
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connell: that's a very good point. we talked to a lot of people, decision makers who haven't really been in that environment, in their 30s or 40s and haven't seen as many of those environments. have to get to liz claman in a minute. thank you very much for coming on. appreciate it. >> thank you. connell: now, i will be back in an hour, apparently. there's nobody else around this week. things will significantly improve because i will be joined by melissa francis on "after the bell" at 4:00 p.m. eastern. by then we will know how things closed out in this crazy trading session. we are down 427 points as we speak on the dow jones industrial average. before we go to liz, one quick announcement. this is a good one. this is great news. we have very happy news to report on an otherwise tough day. a new member, look at this, of the fox business family. allison is an associate producer on this program, has given birth to a little baby girl. welcome into our crazy world,
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raina scarlett, born on friday morning, 1:15 in the morning. congratulations to everybody involved. don't open your eyes. it's a tough world. she will see the dow down 427 and be beside herself. liz claman, how's that for a lead-in? take it from there. liz: you made me nervous. you said we have a baby announcement. connell: not me. trust me. liz: not me, either. connell, thank you so much. with apologies to counting crows, it's been a long december and it's getting even longer at this hour as stocks start the week sagging ahead of the federal reserve's wednesday decision on interest rates and with the dow falling 437 points, the nasdaq tanking 137. look at the russell, bear market. you know what, don't just blame the federal reserve. at any moment, the senate is set to gavel in and folks, we are less than five days away now from the friday deadline to avert a possible government shutdown with no white knight in sight. we hav


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